Better BTU is a small group of industry experts who monitor and evaluate trends in an effort to forward the development of the biomass industry. Made up primarily of engineers, project developers and businessmen, we use our connections with others in the business (consulting firms, lawyers, financiers, etc.) to bring objective and informative blog posts.

Sunday, August 5, 2012

Industry Spotlight: John May

When we think of leaders of the renewable energy field we
frequently picture engineers and scientists tinkering with machines or
lobbyists fighting for emissions controls and government programs that foster
green energy development. But there is another element, behind the scenes, that
must develop in order to make the rest possible: the financial element.

John M. May, Managing DirectorCourtesy: Stern Brothers & Co.

It is for that reason that Managing Director of Stern
Brothers & Co. John May is considered a pioneer in the movement, a leader
in the financial frontier. May heads up the firm’s renewable energy
practice and has built a reputation as one of the top environmental bankers,
focusing primarily on biofuels and biomass.

May’s most significant contribution has been navigating the
use of bonds as a form of financing for alternative energy projects. With the
economy in a fragile state, banks and other traditional sources of capital have
become even more hesitant to take risks - a bad sign for the entire renewable
energy market. May points out that even experienced European banks, which have
financed alternative energy projects in the past, are shrinking its involvement
in the arena.

“A key advantage the bond market provides developers is a broader
and deeper pool of available capital,” said May in an article he co-authored
for the April issue of Renewable Energy
from Waste. “Bond buyers include insurance companies, pension funds, mutual
funds, hedge funds, private equity funds, and other strategic investors. Bonds
can be the sole source of debt for projects or can provide a complement to bank
debt.”

May underwrote the country’s first tax-exempt bond issue to
fund a landfill gas-to-electricity project in 2003. Since that time he has
developed one of the first tax-exempt bond structures sold to major U.S.
institutional investors to fund ethanol projects. He secured a $15 million full
faith and credit guarantee from the state of Illinois for a biodiesel project
in 2006. He also created the bond finance structure adopted by the USDA in its
Bio-Refinery Loan Guarantee Program, resulting in the agency’s adoption of a
new Interim Final Rule for the program in 2011.

Developing an industry takes contributions from competent
professionals in a variety of capacities. In addition to entrepreneurs, the
field needs project developers, attorneys specializing in utility and
environmental law as well as savvy investment bankers and financial analysts.

May’s specialties have helped finance large-scale projects
and Stern Brothers & Co. is one of the most recognized firms in the
financing of biofuels of U.S. The firm represents companies we’ve written about
in our technology blog, including ICM and Rentech.

Financing continues to be a hurdle for smaller-scale biomass
projects. We can only hope for a “John May” to come along with similarly
innovative approaches to help get projects financed and push the industry
forward.

4 comments:

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